Posts Tagged ‘1960’

For the first time ever, members of housing societies will directly earn revenue from cell phone towers and advertising hoardings in society premises. The co-operatives department has come up with a new set of by-laws for housing societies, which will make it mandatory for societies to share with members 50 per cent of the revenue generated through towers and hoardings on society premises.

The new rules also make it mandatory for the society to seek the consent of 70 per cent of flat owners to allow erecting towers or hoardings. A society is also not allowed to lease out more than five per cent of its open space.
The Co-operatives Department has also proposed comprehensive changes in housing society rules with regard to parking space to ensure equitable distribution of space among members. However, the draft is yet to be finalised with the department studying the Supreme Court directive, as well as other Acts included in the Maharashtra Ownership Of Flats Act, on the issue.

“On mobile phone towers and advertising hoardings we have already drafted rules, but those will have to be approved by the minister, and only then will we issue a directive under Section 79 of the Co-operatives Act in this regard. The new rules will ensure society members directly get benefit. This will help members, who pay various charges to the society,” said Co-operatives Department principal secretary Rajgopal Devara.

The draft rules also makes it mandatory for societies to obtain a structural audit report stating that the building would be able to withstand the weight of the cell phone tower or advertising hoarding, and present it at the general body meeting for members’ consent. Only if 70 per cent of the members agree will the society be allowed to go ahead.

More importantly, the changes in rules also make it mandatory for the society to bear the expenses for repairing any damage, such as leakages, suffered by flats on the top floor from the 50 per cent revenue generated from the lease. The society will have to take care of damages to flats both internally and externally if they are caused due to erection of towers/hoardings.

The policy on cell phone towers and proposed changes in society rules were proposed by the Urban Development Department, however, it was the Co-operatives Department that took the initiative with regard to advertising hoardings and revenue sharing proposals.

Mumbai security men working in worst of conditions

Several experts allege that security agencies and co-operative housing societies in the city exploit a majority of security guards.
A weekly off seems like a distant memory to Ram Singh. The 36-year-old security guard of a commercial establishment in an upmarket suburban area hasn’t been able to take a day off in one-and-a-half years. He is on a tight 12-hour shift, 365 days a year. But working his fingers to the bone hasn’t paid off.

“I can hardly make ends meet despite working for this big company. I get Rs5,000 a month and the firm doesn’t even pay us for working overtime,” he alleges.
A guard sitting by Singh says he will make do with this job till the time a better opportunity presents itself to him. “How else can we send our children to good schools?” he asks.

Several experts allege that security agencies and co-operative housing societies in the city exploit a majority of security guards. Worse, they get away with it because of legal loopholes.

A source from a security agency, which employs almost 7,000 guards, takes umbrage at the state of affairs. “The security sector is the second largest employer after the manufacturing industry. How can we tolerate this? Why can’t people pay them fair wages? A security guard puts his life at stake for a measly salary.”

Outfoxing lawmakers
So, how do these ‘exploiters’ work around the law? Experts point out that provisions of the Contract Labour (Regulation and Abolition) Act, 1970, do not apply to an entity if it hires less than 20 employees. “Housing societies say they do not come under the purview of the Act since they do not have as many security guards. But, the moment a housing society employs guards from a contractor or a security agency that has over 20 guards on its rolls, the law immediately applies to that agency, making it the principal employer defined in the Act,” says a source from a security agency.

He reveals that even some corporate houses pay guards just Rs4,500-Rs6,000 a month for a 12-hour shift. “Companies propose low quotes to security contractors when hiring guards. They have no choice but to agree to low quotes since they don’t want to lose out on contracts. No contractor will work with a loss. So, they try to make up for the loss from the guards’ salaries. If the company is inspected, then it resorts to ‘plausible deniability’ and puts the blame squarely on the contractor, even though the company is the principal employer and it is its responsibility to ensure that contract labourers are not exploited.”

Ideally, explains a security personnel working with a housing society, a guard should make Rs10,000 per month for eight-hour shifts. But, that perhaps happens in an alternative, utopian world. “I make only Rs6,000 and that too for a 12-hour shift, with zero benefits… Is that sufficient in these times? I have no choice, but to work two jobs for 24 hours a day. And then, the residents shout at us and sometimes even beat us up for sleeping on the job. But, how can we stay alive and support our families on such wages?” his voice trails off as he gets back to his station.

With pays ranging between Rs3,000 and Rs4,000, most such guards end up working for 24 hours a day through other security agencies. Additionally, they are forced to wash cars in housing societies and run errands for residents, complains Singh.

A resident of a co-operative housing society in Kurla confides that security guards in her building put in 12-hour shifts for Rs5,000. “We have two guards and they work 12 hours a day. Earlier, they used to live in the building. But now, they have moved elsewhere.”

Cover, huh!
Uday Bhatt, president of the Maharashtra Suraksha Rakshak Agadi, a trade union, says as per a notification on minimum wages for security guards issued by the state government on January 1 last year, a security guard should get Rs7,434, including special allowance, daily allowance/house rent allowance, conveyance and washing allowance.

Again, housing societies manage to cut themselves loose from the law. Forget amenities like leave wages, health benefits through the employees’ state insurance corporation and provident fund, “90% of the guards at housing societies are underpaid,” adds Bhatt.

Advocate Vijay Vaidya explains, “Housing societies are not establishments according to the Bombay high court and hence, the minimum wage notification doesn’t apply to them. The agencies want to increase their profit margin and therefore, pay the guards a pittance. There is no forum available to complain. Clearly, the security guard board will never push for setting up such a forum or even amend the Security Guard Board Act as the authorities are busy looking after themselves.”

The Act applies to people who work as security guards in any factory or commercial establishment through agencies but it does not cover direct and regular employees.

Bhatt says only 24,000 guards who have registered themselves with the security guard board are covered under the Act. “But, there are over 2 lakh guards in the city who are working illegally with no benefits. The government machinery is not interested in curbing this problem despite a number of high court rulings.”

Those guards employed by private security agencies who fail to register themselves with the security guard board have to fill a form to seek exemption from the Maharashtra Private Security Guards (Regulation of Employment and Welfare) Scheme, 2002, which covers the entire state, with the exception of a few districts, says Bhatt. “The main aim of the Act is to do away with middlemen who take advantage of the guards.”

A top official confirms that employees of housing societies are not able to take advantage of the provisions of the Act. “We can’t entertain their complaints and they will have to approach the labour commissioner. Of course, we require an amendment to help resolve this issue. Essentially, the Security Guard Board Act applies only to factories and commercial establishments. It does not cover housing societies.”

No word on the numbers
Gurcharan Singh, president of the Security Association of India, claims that there are over 2 lakh registered security guards in Mumbai and Thane districts and that 80% of them are employed in factories and commercial establishments where they receive a minimum wage of Rs7,200. “Five percent to 10% of the guards are employed in small-scale industries and 20% are employed in co-operative housing societies. Seventy percent of those employed at housing societies are exploited and are not paid minimum wages. Some of these are also deployed by fly-by-night agencies which bend the rules at will.”

But, the association doesn’t seem to have a finger on the pulse of the situation. If one were to take it at its word, only 40,000 guards are reportedly hired by housing societies. So, assuming that there are two guards to a society — one for the day and another at night — what the association seems to be suggesting is that there are only 20,000 housing societies in Mumbai and Thane. Clearly, that is not the case, which means that the association, the government and the Maharashtra security guards board have not yet even begun to enumerate the number of guards in Mumbai and Thane, let alone in the entire state.

A member can conduct audit of his own society

Unlike under the provisions of the Companies Act, 1956, there is no such restriction under the provisions of Maharashtra Co-operative Societies Act, 1960 that a shareholder or a member cannot conduct audit of a cooperative society.In Mumbai, is it possible for a member to do statutory audit of his own society?—Bhavesh
Unlike under the provisions of the Companies Act, 1956, there is no such restriction under the provisions of Maharashtra Co-operative Societies Act, 1960 that a shareholder or a member cannot conduct audit of a cooperative society. Therefore, in the absence of any such bar, a member of a co-operative housing society can conduct internal or statutory audit of the society in which he is a member, but he should not be a part of its managing committee or sub-committee because in that case he would be reporting inter alia on his own actions and inactions.Can a society allow a flat to be used for commercial purposes by charging extra amounts?—Raghuram
Use of a flat for particular purposes and change of use is allowed by local authorities, primarily the municipal authorities. A cooperative housing society has no power to allow change of use and charging extra amounts for allowing such change would be illegal. However, while permitting change of user, the municipal authorities may require you to obtain no-objection from the society.

During the year, I sold two flats and am contemplating investing the capital gains in purchase of flat(s) by adding my wife’s name in one purchase. Out of the sale proceeds, some amounts have been used by me in repayment of loans and therefore I will be using my savings in acquisition of new flats.—Manohar
Capital gains resulting from sale of a residential house, if utilised for purchase or construction of another residential house, would entitle you to avail exemption u/s 54 of the Income Tax Act, 1961 if the flat transferred by way of sale was held by you for more than 36 months on the date of transfer thereof and acquisition of new house is within specified time limits and subject to specified conditions.

Section 54 does not contain any condition as to how many houses one may transfer during a year and therefore, your selling two houses and acquiring separately two houses against each sale would be within the provisions of section 54. As far as in one purchase you want to add the name of your wife as a co-purchaser, the same can be done provided only your funds are invested. Further, source of funds for investment in new houses may not be only the amount of sale proceeds but can be from anywhere including your accumulated savings.

Members of co-op housing societies will have to attend at least 2 AGMs in 5 yrs.
Want to skip the annual general meeting (AGM) of your co-operative housing society? Do it at your own peril. For, it could cost you your membership.

Though members crib about lack of amenities in their housing society, majority of them usually do not bother to attend the AGM. And, even if they do, they do not raise any issue at the meeting or participate in the election process.

So, to increase the participation of members of housing co-operative societies in administrative matters, the state government has introduced a series of amendments to the co-operative act.
According to the amendment introduced in the co-operative Act by the government in March, any member of a co-operative society, including housing, will have to attend at least two AGMs in five years, failing which he or she is likely to lose membership.

However, the member would be given the opportunity to explain his or her absence. The government has also imposed restrictions on the district registrars of co-operatives. Henceforth, a district registrar can supersede the society and appoint administrator only if the government’s financial interest is involved. As the government does not have any stake in housing co-operative societies, the district registrar cannot supersede the body on any issue, said sources in the cooperative.

Of course, this rule only applies to agriculture societies or farmers’ credit societies where the government provides loan for agriculture.

Now, attending general body meetings of your hsg society is a must

Those who do not attend the meet for 5 years will be barred from voting or contesting society polls, according to amended co-op act
Make it a point to attend all general body meetings of your housing society. For, under the amended Maharashtra Co-operative Societies Act, 1960 members of co-operative housing societies who do not attend at least one general body meeting (GBM) in a consecutive period of five years stand to lose the privilege of voting and contesting elections.

Though experts welcome the provision as positive and expect it to bring in more transparency in functioning of cooperatives, property owners especially those working abroad or out of the state find it taxing.
Advocate Dnyanaraj Sant, secretary of Grahak Hitavardhini, a consumer rights organisation, said there is no provision in the act for members to nominate someone else to attend meetings on their behalf. A non-active member may become an active member after five years if he fulfills all eligibility criteria.

“It is not practical for everyone living abroad who own homes in India to come within six months of the closing of the financial year, which is the time period within which the GBM is supposed to be held. Most people come to India in December, when they get Christmas breaks,” said Anagha Bhise, a chartered accountant working in Hampshire, UK who owns a flat in Pune.

Constitutional amendment that led to the change: The 97th constitutional amendment makes it a fundamental right to form a co-operative society by inserting the words “or co-operative societies” in Article 19 (1) (c), which guarantees the right to “form associations or unions or co-operative societies”.

The amendments

Amendments to the Maharashtra Co-operative Societies Act, 1960

The amendment makes it mandatory to hold a general body meeting (GBM) within six months of the closing of the financial year, i.e. before the end of September every year.

The term of office of elected members of the management committee is now five years. This is aimed at continuity in executive decisions. The term was not defined earlier.

The minimum number of members for the management committee is 7 and the maximum is 21. The Act has been amended to include reservations for SC/ST, BC, women, NT, in the absence of whom the seats will be filled by the other members.

The state government has been given the authority to constitute a state co-operative election authority, along the lines of the State Election Commission, which will be vested with quasi-judicial powers to take action against members who do not comply with the provisions of the Act.

You can take your housing society to consumer court

The Consumer Disputes Redressal Commission directed the district consumer forum to hear the case of Rajan Alimchandani against his society by declaring him a “consumer”.
Now, residents of cooperative societies, locked in a battle with the management, need not wait for years to get justice from cooperative courts. They can hit the fast track to justice — consumer courts.

In a landmark judgment, the State Consumer Disputes Redressal Commission directed the district consumer forum to hear the case of 72-year-old Worli resident Rajan Alimchandani against his society by declaring him a “consumer”. The commission also directed the forum to dispose of the case within three months.

Three years ago, the management of Venus Cooperative Housing Society on Worli Seaface, of which Alimchandani is a resident, decided to replace the old bathroom pipes. The decision was taken without a general body meeting, and each flat owner was billed an additional Rs5,000 over and above the maintenance charges. The society plumber was entrusted with the job after Rs1,40,000 was collected.

Alimchandani found leakages inside his bathroom ever after the pipes were changed. “This happened after I had my bathroom spruced up at my own cost. I spoke to the management, but no one responded to my written complaints. So, I moved the district consumer forum,” said Alimchandani.

But the forum dismissed the complaint, saying that under the Consumer Protection Act (CPA), 1986, he was not a consumer. Alimchandani then filed an appeal in the State Commission. In an order, Justice BB Vagyani and member Anjali Karadkhedkar said the Supreme Court had observed that the remedies under CPA for the aggrieved party were wider.

It said CPA not only created a framework for speedy disposal of consumer disputes by granting specific reliefs, but the consumer forums too had the jurisdiction to award compensation for mental agony and suffering. The Commission held Alimchandani a “consumer” and his complaint maintainable, and directed the case back to the district consumer forum for speedy redressal.

Although Alimchandani has demanded Rs 32,000 as compensation for his three-year-old battle, he wants to donate the money to the society for repair work. “For me, it was a fight for my rights,” he said.

The judgment has wider repercussions as more than 15,000 cases are pending in the six cooperative courts in Mumbai. “Cases referring to deficiency of services like leakage and parking can now be tried in consumer courts for faster redressal,” said advocate and president of Co-operative Societies Residents and Users Association Vinod Sampat.

No clarity on rules for election to housing societies in Mumbai

Though the state government has postponed the elections to co-operative societies till the end of 2014, there is no clarity on rules for elections to housing societies. The rules for election to housing societies have to be framed by the co-operative authorities.

Co-operation minister Harshvardhan Patil had told media persons that the co-operative societies with less than 100 members can conduct elections on their own. However, confusion still persists as the rules for the same are yet to be framed. The draft for framing of the rules is pending with the minister.
“Even housing societies with less than 100 members will not be allowed to conduct elections on their own. First let the rules be framed,” said an official of the co-operative department.

“It is for the minister to approve the rules and then we can frame them,” an official said.

There are 32,000 co-operative bodies, including housing societies, which have not held elections since 2011. The election authority will supervise, control and conduct polls to all registered co-operative societies, including housing societies, banks, credit societies, sugar factories and milk federations.

The state had amended the Maharashtra Co-operative Societies Act, 1960, and notified the authority too and also appointed certain posts for the election authority. However, it has not appointed the election authority that is the state co-operative election commissioner so far.

The state has around 2.28 lakh co-operative societies with around 5.25 crore members, including 88,472 co-operative housing societies.

Society must pay for repairs of leaky roof: HC

The Bombay High Court, in a recent decision, has held that a co-operative society is responsible for repairs of a leaking roof.
MUMBAI: The Bombay High Court, in a recent decision, has held that a co-operative society is responsible for repairs of a leaking roof.

The case dated back to 1990, when Balani, who had to repair the roof of his top floor flat as it was leaking, demanded that society reimburse the expenses as per the Maharashtra Cooperative Societies Act, 1960.

The issue became a little tricky, as the terrace above Balani’s flat was owned by another flat owner as a private terrace.

In a suit before the Co-operative Court, Balani pleaded that according to principles governing cooperative housing society, even the private terrace belonging to one of the flat owners was the property of the society, hence the society was responsible for its repairs.

The Cooperative Court upheld this argument, and directed the society, to bear expenses for repair of terrace, which was a part of roof of Balani’s flat.

However, the society challenged the ruling in the Bombay High Court.

But the high court, while confirming that society will have to bear repairing expenses for leaking roof, observed that a private terrace was not society’s property.

Further, the high court held, it was not necessary to decide whether such a terrace was society’s property in this case.

Bylaws framed by the state government for housing societies — under the Maharashtra Cooperative Societies Act — clearly say that maintenance and repairs of roof of a flat is society’s responsibility, the court ruled.

Transfer of shares in CHS is liable to registration

Land has not been conveyed in favour of our society. Is there any stamp duty on transfer of shares? Can society refuse to transfer membership without registration? Can a society charge fees on transfer of garage?
In case of transfer of shares in a co-operative housing society, what is conveyed by the instrument of transfer is not only the transfer of shares but such transfer of shares is coupled with right, title and interest in the immovable property and therefore on such a transfer, stamp duty becomes payable.
Merely because no conveyance has been executed by the builder or landlord in favour of co-operative society, it cannot be said that flat owners are transferring only the shares and not right, title and interest in immovable properties. Instruments of transfers of shares in a CHS by virtue whereof ultimately flats get transferred are conveyance under the provisions of the Bombay Stamp Act, 1958.

With regard to registration, one may like to take a stand that section 41 of the Maharashtra Co-operative Societies Act, 1960 provides, with overriding effect, exemption to any instrument of transfer of shares in a co-operative society.

However, there is a circular of department of co-operation requiring committee to ensure stamping and registration before effecting transfer of shares in a CHS. A flat purchaser may contest validity of the said circular being in contradiction of the specific provisions of law.

As far as society is concerned, committee would have to implement the said circular. Registrar of co-operative societies would go by the circular. Registration Act, 1908 also requires registration of an agreement for sale, but section 41 of MCS Act, 1960 overrides Registration Act, 1908 in respect of transfer of shares in a co-operative society.

Courts have consistently taken a view that transfer of shares in a CHS is in substance transfer of immovable property. Flat purchaser having paid various kinds of considerations would like to get transfer effected by the society in his favour at the earliest.

On such considerations, a strong case lies in favour of requirement of registration of an agreement for sale of a flat in a CHS. If, however, the shares have already been transferred in favour of a member, then the CHS cannot enforce registration.

Under the provisions of MOFA, 1963 read with model bye laws of a CHS, a garage is also a flat and therefore transfer of garage would attract transfer fees.